Who benefits from the abolishment of net neutrality?

Net neutrality's dismantling by the FCC brings with pros and cons for Internet Service Providers and consumers.

Stephen Hawking once said, “We are all now connected by the Internet, like neurons in a giant brain.” The world wide web has taken over the epicenter of our existence. It has been a tool that influences the way we think, speak, and act. While its power is undeniable, the Internet is now being placed under scrutiny by the United States government for this known fact.

In a bid to deregulate the industry, the Federal Communications Commission (FCC) voted to repeal net neutrality rules in mid-December this year. With this, Internet Service Providers (ISPs) can block, throttle and censor the Internet at their judgement and even slap higher fees on consumers and content providers. This makes the net a little less powerful for the users and startups, and puts full control on ISPs and even the government.

FCC trumps net neutrality

Late in November, FCC chairman Ajit Pai revealed his plans to repeal the rules on net neutrality. In his proposal, the Donald Trump-appointed head noted that “the federal government will stop micromanaging the Internet” and instead will simply require ISPs to be transparent with their policies.

What is net neutrality?

Under the previous—and recently abolished—rules, Internet providers cannot deliberately block content nor can they choose to boost or slowdown traffic for certain sites and applications. Also known as the “Open Internet,” the governing rules limit the broadband providers from choosing the winners and losers in the content battles, possibly prioritizing their own content or favorable third-party services over others.

The abolishment of the rule has content providers, free Internet supporters, and even consumers calling foul. Without rules upholding the freedom of the web, ISPs can now favor certain services which they have pay-for-play agreements (paid prioritization) or offer better Internet speeds for their own content. Conversely, competition may experience slower traffic (Ex. Comcast slowing down Netflix, while boosting its own streaming service), which would also affect the user’s browsing and streaming experience.

Why repeal net neutrality?

Pai and free-market advocates claim that the Internet industry in the country has lost billions in investment and slowed development because of the Title II rules. According to the data presented by the FCC chair, among the 12 largest ISPs in the country, domestic broadband capital expenditures dropped by 5.6 percent. The loss, which accounted for $3.6 billion, happened in between 2014 and 2016—the first two years of net neutrality.

Title II—originally designed in the 1930s during the Ma Bell telephone era—has also derailed investment in smaller Internet providers. Smaller ISPs had to cut back on investments and delay infrastructure upgrades, affecting the possibility of having faster net speeds for consumers. About 22 other smaller ISPs claim Title II has affected “their ability to obtain financing.”

Citing nonprofit Free State Foundation, Pai revealed that “Title II has already cost our country $5.1 billion in broadband capital investment. And given the multiplier effect from such spending, that means Title II has already cost our nation approximately 75,000 to 100,000 jobs.”

He also claimed that the FCC was “dragged kicking and screaming” into implementing net neutrality by the government in 2015. According to him, the regulations were imposed to answer “hypothetical” issues that were non-existent even during the time the ruling was introduced.

“We were warned that without [Title II], the Internet would suddenly devolve into a digital dystopia of fast lanes and slow lanes,” Pai said in a speech he gave at Washington, D.C., in April 2017. He added that these fast lanes and slow lanes are non-existent and the policies were based on “hysterical prophecies of doom.”

Supporters of the repeal also suggest that as with other industries, paid prioritization will mean more portals for investments that could equate to expanding broadband infrastructure and would increase internet access and data speeds.

Who will regulate Internet providers then?

With the abolishment of net neutrality, FCC now puts the power in the hands of providers. They will not be bound by any regulations, but are simply required to be transparent with their services. They will have to publicly disclose any form of blocking, throttling, or paid prioritization to consumers and content providers. These will then be evaluated, now by the Federal Trade Commission, whether they go against the anti-competitive clause.

Who benefits from killing the Open Internet?

Internet Service Providers are ultimate winners

As if this wasn’t an obvious one. ISPs should celebrate now that regulations surrounding the service have been dissolved. Firstly, they can now implement paid prioritization services. This means mobile data and broadband services can charge content providers additional fees to bring content to consumers at a higher speed.

Moreover, they can also opt to block or deliver certain sites and apps at slower speeds, while creating faster lanes for their own content. Similarly, ISPs could start charging users more to access certain sites at certain speeds.

While Broadband for America, a coalition of telecommunication companies, promised to preserve the “Open Internet,” some telcos have already shown signs of changes. The group which includes AT&T Inc., Charter Communications Inc., and Comcast Corp., recently ran a full-page ad on the Washington Post promising that they will not block legal content and not throttle Internet speeds. However, there was no mention of paid prioritization. On top of that, Comcast has deleted any mention of prioritizing Internet traffic on their website the day net neutrality was repealed.

How about the consumers?

While experts suggest the consumers will experience minor to no changes in the way they consume the Internet, there are still risks for the end-users. Providers can capitalize on the changes to offer better services for certain apps—say, T-Mobile offering cheaper data bundles to stream Netflix and HBO—and they could also charge higher to offer better connections to some apps and services.

So far, some telcos have started offering lower data consumption for certain partner apps and streaming services. Without net neutrality, others are expected to offer more data options for users that would capitalize on the new freedom Internet providers have. Making the repeal a win situation for users.

However, should paid prioritization kick in, the public might have to jump ship from one provider to another just to enjoy the perks offered for their preferred streaming service. More so, banning of apps may follow after a few years, limiting the way we use the all-powerful web. Should this ever happen, it will be the end of the Internet as we know it.

Irfan Jafrey is the CEO and Founder of Roosterly, a social media AI and marketing platform that’s changing how executives interact online. Prior to Roosterly, he founded digital performance marketing firm Adrevenu, after being an integral member of the DoubleClick SEM team prior to and through their acquisition by Google.